FOREST TALK
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THE CORONAVIRUS OUTBREAK CONTINUES to impact negatively on the forestry industry, with many out of work and in serious financial crisis.
“We need to have politicians, government officials and the public outside of forestry fully understand just how dire our sector of the industry is for our contractors,” says Forest Industry Contractors Association (FICA) CEO Prue Younger.
“Logging and forest roading contractors who employ the bulk of the people and carry the highest debt have been hit extremely hard. The planting crews are the least affected for now, but their work will inevitably be impacted if depressed log prices continue long enough,” she says.
The contracting workforce is more vulnerable than in any previous market crash, she says. As a consequence of the mid 1990’s planting boom, far more of the national cut is now in smaller forests. Smaller owners have a short window to harvest and are far more sensitive to price drops than larger corporate forests historically were. Lay-offs are a direct result, with hundreds of workers already laid off and more to follow.
“Our contractors do not have cash reserves to sustain unemployed staff or the capital repayments on their machinery,” Ms Younger says. “To top it off, we are now heading into winter, when economic conditions typically only get tougher for contractors. The government income support, while welcome, is frequently below people’s existing budget and living arrangements.”
Commenting on the recently announced $12.1 billion support package from government she says the package will be beneficial to some contractors who have been operating at 70% or below, to subsidise their employees and continue sustainably, but comes too late for those who lost their contracts in the past five weeks.
“They are loaded with financial debt as a result of having very expensive equipment. When nothing is coming in, they can’t pay that back. Financial lenders have been exceptionally supportive but when people are out of work the pressure will come to start selling equipment and having to relinquish it.
“We still don’t know how long this is going to go on for. We see part of the industry disappearing now and the issue will be where our workforce will come from when things do start picking up again,” she says.
The knock-on effect to the supply chain is being felt by transporters too. As the harvest volume drops, logging truck drivers get laid off and then the ports feel the pressure of unemployment too.
Log Transport Safety Council (LTSC) Chairman Warwick Wilshier says the effects are far reaching with noticeable losses to the industry: “The lack of log truck drivers prior to the COVID-19 crisis was bad enough and now the drivers are seen to be an easy target for work in other industries like horticulture, freight and road maintenance.
“After a few weeks of paying wages and getting no work in, there is only one option – for contractors to relinquish their staff to opportunities outside of forestry. It is hardly ideal, and the fear is that they will walk and not come back. When work starts up again there is going to be a massive hole in the workforce that will take time to build up.”
Those same sentiments are being felt as FICA engages with deployment opportunities being offered to contractors by horticulture.
“About to start their season, they are desperately short of equipment operators, along with tractor and forklift drivers, and the skills learned in forestry are generally transferrable,” says Younger.
“The social dilemma is turning our focus to support our workforce in maintaining some income for families and whanau. We acknowledge the extreme social effects this crisis is having on redundant employees. We already had a significant issue meeting our workforce needs in forestry, so when business starts up again, we are going to be in a crisis situation with gaining back a skilled workforce,” she adds.
The solution isn’t a simple one, but more needs to be done by Government and forest owners to preserve and retain a skilled workforce, she says. NZL